KUALA LUMPUR, June 28 (Reuters) - Nestle's membership of industry watchdog the Roundtable on Sustainable Palm Oil (RSPO) has been suspended as the Swiss food group failed to submit a report detailing how it would ensure the use of certified sustainable palm oil, the RSPO said.

The RSPO is a body of palm producers, consumer companies, and activist groups which provides sustainability certificates for the industry. Certification of environmentally sound behavior is required by some major palm oil buyers in the West, including major food and candy makers such as Unilever and Mars.

The suspension is effective from the announcement and extends to all Nestle subsidiaries, according to an RSPO statement dated Wednesday.

RSPO members are required each year to specify their action taken over the previous 12 months and plans for the coming year and longer term on how they will produce or buy certified sustainable palm oil in a report, the RSPO said.

"Nestle has not submitted the report for 2016, and for 2017 submitted the report without a time-bound plan," it added.

Nestle, a big palm oil buyer, said in a statement on Thursday that it will continue its dialogue with the RSPO and hopes to re-qualify for membership in the near future.

Palm oil is the most widely used edible oil in the world, found in everything from margarine to cookies and from soap to soups. The industry has come under scrutiny in recent years, as it has been blamed for deforestation and forest fires which cause widespread haze.

"We share the RSPO's ambition for improving the social and environmental performance of the palm oil sector. Our approaches to this do differ and we respect the RSPO board's decision regarding Nestle's membership. We will continue our dialogue with RSPO and hope to re-qualify in the near future," it said. (Reporting by Emily Chow Editing by Alexandra Hudson)